Planning staff and OEWD outline downtown recovery plan as retail and office seek comeback

At the Dec. 9 Planning Commission hearing, department staff and the Office of Economic and Workforce Development told commissioners the city’s downtown and Union Square remain crucial to jobs, sales tax revenue and the region’s economy, but continue to lag as office vacancies and fewer visitors persist.

Director Hillis (Planning Department) framed the downtown recovery as an equity and economic priority, noting the city’s visitor‑oriented retail and hospitality sectors were hit hardest by the pandemic. "It kept many of our businesses up and running in commercial corridors active and vibrant over the past 18 months," Hillis said, describing the Shared Spaces program and compliance grace periods for parklets and outdoor operations.

Kate (OEWD) detailed trends in office and retail, saying most employers expect employees to return to the office in reduced schedules and that the city is seeing both sublease availability and new leasing activity. She described strategies to increase downtown foot traffic and worker returns, including direct outreach to large employers, marketing to conventions and events, an ambassador program at transit nodes, and creative programming such as the "Let It Glow Downtown" exhibition.

Data shared: Staff cited shrinking retail sales tax receipts for core districts (District 3 and 6 down significantly from pre‑pandemic levels), hotel occupancy recovering toward ~45–50% and unemployment below its pandemic peak. Commissioners pressed staff on hospitality, convention incentives and retail theft impacts; staff said the city has included Moscone incentives in the budget and is coordinating safety, cleanliness and marketing to attract events.

Why it matters: Planners emphasized the link between downtown foot traffic and broader neighborhood economic health. Commissioners asked about zoning flexibility to enable hybrid retail/production (PDR) uses, whether to encourage housing downtown, and how to help small retailers move online and access distribution capacity.

Next steps: Staff said they will provide further analysis — including an upcoming feasibility memo on SB 9 scenarios and a public release of retail recovery analysis in early January — and collaborate with OEWD and other agencies on targeted programs.